More than 10,000 people had also signed a petition online, claiming the text was filled with factual inaccuracies.

Responding to the decision, Wendy Doniger issued a statement saying she was deeply angered and concerned for freedom of speech in India.

"The true villain of this piece," she said, is "the Indian law that makes it a criminal rather than civil offence to publish a book that offends any Hindu, a law that jeopardises the physical safety of any publisher, no matter how ludicrous the accusation brought against a book."

Shiksha Bachao Andolan said it was happy with the settlement but Indian cabinet minister Jairam Ramesh told the Press Trust of India the decision was "atrocious", adding the book was "not blasphemous by any means".

The reports have prompted widespread criticism on social media, amid growing concern that religious groups are stifling free speech and artistic expression in India.